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A weaker greenback makes dollar-denominated crude less expensive for users of other currencies, potentially spurring fuel demand. "A combination of a weaker US dollar and supportive comments from Saudi Arabia saw crude oil prices rise," ANZ said in a note to clients.

Oil has drawn support from top crude exporter Saudi Arabia, which said it would adhere strictly to its commitment to cut output under the agreement between the Organization of the Petroleum Exporting Countries (Opec) and other producers.

Under the agreement, Opec, Russia and other non-Opec producers have pledged to cut oil output by nearly 1.8 million bpd, initially for six months, to bring supplies back in line with consumption.

The output cuts agreed by Opec and others are likely to come largely from field and refinery maintenance, BMI Research said in a note. It said oil producers are expected to use lower volumes needed for domestic power generation in a bid to maintain export volumes.

"Sticking to output targets is important but export volumes from the participating countries are a much better indicator of how the cuts will affect the market," it said. "Participating members are keen not to sacrifice vital export revenue so are trying to find ways to limit domestic crude usage in order to prioritise filling their contracts to foreign refiners."

At the same time, US oil production is set to rise towards 9 million barrels per day, the US government said on Tuesday, providing headwinds to oil futures.

Representative Ryan Zinke of Montana, President-elect Donald Trump's nominee for interior secretary, on Tuesday said he would consider an expansion of energy drilling and mining on federal lands but would ensure sensitive areas remain protected.